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October 10, 2002
CONTACT: David Fish
(202) 289-8928

Non-Traditional Providers Buoy Phone Competition in MD
May Responds to Think Tank Pres. Who Confuses Market Conditions

WASHINGTON, D.C. - Wireless and cable telephony are helping to create an environment of expanding competition at the local level as they join with wireline services to provide consumers with more choices. That is the state of the market, based on publicly available statistics, according to Progress & Freedom Foundation’s Senior Fellow and Director of Communications Policy Studies Randolph J. May who co-wrote the recent study, “Local Exchange Competition: Progress in Maryland.”

Writing in the Baltimore Daily Record, May points out a common mistake made by people attempting to measure the true growth in local telephone competition – an over- reliance solely on numbers of traditional wireline subscribers. “In its most recent Local Telephone Competition report, the FCC found that 98 percent of Maryland’s ZIP codes are served by at least one Verizon local phone competitor,” May writes in response to an opinion article written by Christopher Summers, president of the Maryland Public Policy Institute. The same FCC report showed that “Maryland had 2.3 million wireless telephone subscribers, a year-to-year increase of 16 percent.” In fact, he notes, an increasing number of wireless users are “discontinuing their wireline service altogether.”

Competition is also coming from another non-traditional source: cable. “The cable industry has spent $65 billion over the past six years to upgrade its facilities to carry not only digital television, but also local telephone and high-speed Internet access services,” May writes. Quoting a September Wall Street Journal story, he reminds readers that cable companies “’are beginning to chalk up impressive results…’”

May says Verizon should be allowed into the long–distance market in Maryland because it “has met the market-opening requirements of the 1996 Telecommunications Act” and “made a strong compliance showing.” (It has been granted permission to provide long distance service in eight states already.) Moreover, May writes, “FCC data shows that the greatest amount of competitive activity takes place in the local market after the incumbent local carrier is allowed to provide long distance service.”

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation